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Cisco Hasn't Lost Luster

NEW YORK (
TheStreet) --
Cisco's(CSCO - Get Report)turnaround continues to be a work in progress, but the networker still has plenty to offer investors heading into its fourth-quarter results, say analysts.

"We continue to believe Cisco is an underappreciated turnaround story similar to what we have seen with
Apple(AAPL - Get Report),
IBM(IBM - Get Report), and
EMC(EMC - Get Report) in the past, explained Sterne Agee analyst Shaw Wu, in a note released on Tuesday. Wu, who has a buy rating on Cisco, anticipates a decent quarter and guidance, albeit amid lowered expectations.

Analysts surveyed by
Thomson Reuters expect Cisco to report revenue of $11.6 billion and earnings of 45 cents a share after market close, compared to $11.2 billion and 40 cents a share in the same period last year.

For its first quarter of fiscal 2013 ending in October, Wall Street currently expects Cisco to report revenue of $11.66 billion and earnings of 46 cents a share.

Nonetheless, Cisco's results come hot on the heels of yet another workforce reduction as the company announced plans to cut its workforce by 2% last month. The Dow component also underwent a
massive corporate overhaul last year, which involved
layoffs and widespread restructuring.

Seen as a key barometer for IT infrastructure spending, Cisco struck a cautious tone when it delivered its third-quarter results in early May.

Although the San Jose, Calif.-based firm
eased past Wall Street's estimates, its shares tanked on weak fourth-quarter guidance. Specifically, Cisco CEO John Chambers cited Europe, the public sector and India as areas of concern. Southern Europe's economic problems, he noted at the time, were spreading to northern Europe.

Nomura Equity Research analyst Stuart Jeffrey, however, sees signs of positive momentum crop up over the last three months.

"While the demand environment has been challenging, we believe it's already baked into Q4 expectations," he explained, in a note released on Tuesday, adding that Cisco's gross margin should continue to come in above its 61% to 62% guided range.

Recent comments from John Chambers could also bode well for the company's numbers, according to Jeffrey, who has a buy rating on the stock. "Management's latest views on the macro have improved, noting that the U.S. has firmed while Europe has not deteriorated further," he explained.